The ongoing saga involving Chinese tech firm Huawei and the U.S. government is more complicated than ever. On Saturday, American chipmaker Qualcomm received approval to sell its 4G phone chips to Huawei. That allows it to sidestep a larger ban that prohibits U.S. companies from doing business with the Chinese firm.
It’s worth noting that the trade exception won’t allow Qualcomm to ship its high-end 5G chips to Huawei. Nonetheless, the news comes at the perfect time. Huawei is in dire straits as U.S. sanctions have cut-off a majority of its chip supply.
Although the recent exception isn’t enough to save Huawei’s smartphone business, it is a step in the right direction. It’s also a win for Qualcomm as it gets to retain one of its chip customers—at least partially.
Before the U.S. trade ban limited which companies Huawei could work with, the firm was already using its in-house Kirin chips in its high-end smartphones. However, Huawei’s mid-range and budget devices feature Qualcomm’s Snapdragon chips.
Shortly after the U.S. government added Huawei to its Entity List, Qualcomm filed for permission to continue selling its chips to the Chinese firm. It argued that rival chipmakers from outside the U.S. would simply step in to fill the void if it was restricted.
On Saturday, a Qualcomm spokesperson told Reuters that the company’s request had been granted. She said, “We received a license for a number of products, which includes some 4G products.”
At this point, it remains unclear which specific chips Qualcomm is able to ship to Huawei. Experts believe that the license will have a relatively small impact. This is due to the fact that the majority of consumers now want 5G smartphones. Indeed, the age of 4G devices is quickly coming to a close. With that in mind, Huawei won’t have long to utilize Qualcomm’s 4G silicon before it needs to start worrying about 5G.
Industry insiders have stated that Huawei’s chip supply, largely made up of silicon purchased before the September trade ban went into effect, could run out as soon as next year. With no real alternatives in sight, Huawei has its back against the wall.
In the meantime, U.S. tech firms like Micron Technology are also seeking approval to resume selling to Huawei. Intel, Samsung Display, and Sony have already secured licenses of their own.
It will be interesting to see how the White House handles the situation with Huawei as a new administration is all-but-certainly set to take office in January. Although it isn’t likely that things will change drastically, Huawei is hanging on to hope. Otherwise, the tech firm could be facing some difficult choices in 2021.